Read behind Google’s ＂cheap sale＂ of satellite imagery company： the advantages outweigh the disadvantages

　　For Google, there are too many assets under its command, and it is in the order of "100 million" at random. However, the satellite image company that was acquired for 500 million dollars was recently reported to have been sold for 300 million dollars. Although we can’t guarantee the true accuracy of the figures, industry rumors say that Google sold it at a low price. That is to say, this business is sold at a loss by Google, which may also indicate that Google has diluted the satellite image market, or has restarted planning for future development, and even needs to divest these assets. Of course, maybe Google is gradually transforming into a "lightweight" company and needs to divest some less important businesses. It’s just that Google Maps was such a beautiful product line for a while. Won’t divesting satellite image business like this affect map products? What is Google’s ambition behind the scenes, or is it helpless?

　　Has the industry reached a consensus on "selling at a low price"?

　　Google and mapping start-up company Planet Labs announced on Friday that the latter will acquire Google’s satellite imagery company Terra Bella, which Google bought for $500 million about two years ago. Under the agreement reached between the two parties, Planet Labs will acquire the Terra Bella business and satellites, while Google will continue to provide satellite imagery for its map products through licensing. Obviously, Google still needs maps urgently. Although it is sold, it still needs the business product line.

　　According to insiders, Planet Labs’ acquisition price is lower than Google’s $500 million when it acquired Terra Bella at the time, but the price of this transaction is still more than $300 million. The source also revealed that Google will become the majority shareholder of Planet Labs and continue to invest in Terra Bella based on the expectation of long-term success. This also shows that Google cannot give up the map business, and it cannot give up. Too many product lines still need the support and support of Google Maps, and the divestiture may be just the divestiture of assets.

　　The market interpreted the deal as the latest effort by Google’s parent company, Alphabet, to manage expenses, which it is currently taking company-wide. The subconscious is that Google has gone to great lengths to manage expenses, and it may have to divest everything that can be divested. This may also be to "streamline" and help Google have a better financial forecast, right?

　　In fact, over the past year, Alphabet has scrapped plans to offer internet services through solar-powered drones, stopped expanding its Google Fiber internet service, and slowed down the development of drone delivery services. In addition, several company executives have also left. It is reported that several map executives have been poached by Uber. For a ride-hailing platform, maps are also life infra.

　　In addition, Alphabet’s earnings report last month showed that the company’s "Other Bets" business suffered a loss of $1.088 billion in the fourth quarter of 2016, with revenue of $262 million. Perhaps this is the internal factor that forced Google to keep shrinking, and it is also a loss of $1 billion. If it cannot be transferred and adjusted in time, the burden in the future may become more and more large. Even if Google is rich, it cannot withstand such tossing. It may be the best way to shake hands earlier.

　　Poor Terra Bella?

　　For Terra Bella, formerly known as "Skybox Imaging," which Google bought in 2014 for $500 million, it has seven data collection satellites and provides services to third parties in addition to Google Maps.

　　Google spun off this business because "it is more cost-effective to buy image data directly from a third party than to launch and operate its own satellites." Google, which used to be not short of money, now needs to be careful, just like Apple wants to sue Qualcomm. The original patent fee is just a drop in the bucket, but when the performance declines, and the share and profit both decline, Apple has to cut back on revenue and needs to "wipe oil" from Qualcomm. For Google, is it also a bit of "sympathy for the same disease"?

　　In fact, no matter who the owner is, it has little impact on Terra Bella. Its business is still within its familiar range. For Planet Labs, this acquisition will make it more competitive. Of course, for some experts at Google itself, it may be necessary to "invest in another owner". In fact, some executives have chosen to leave.

　　Planet Labs has been struggling to find customers, according to people familiar with the matter. It operates dozens of satellites, each weighing around 10 pounds (4.5 kg), but can only provide low-resolution images. Terra Bella’s satellites, by contrast, are more powerful and capture higher quality images. The acquisition will undoubtedly help Planet Labs expand its business.

　　There is also a saying in the market that with the third-party industrialization of the map business, it is also a good thing for other application users, such as Apple and many mobile phone manufacturers, online car-hailing platforms, etc. After all, after not being under Google’s control, the competition may be more fair. Of course, for Google, there are other secrets.

　　The glorious decade of Google Maps

　　The mapping business was once an unusually prosperous and glorious business for Google. For a time, the application of time was also overwhelming. Google Maps began as a living atlas, with MapQuest, the leader in the online mapping industry at the time, providing a printable list of directions. But Google took a different path: superimposing navigation paths on the map.

　　Moreover, Google Maps can also load maps directly on the web browser, making it convenient for users to explore the whole world anytime and anywhere. There is no need to install special software. At that time, the experience was super strong, and many people quickly fell in love with it. In 2005, no one could really understand the potential of web maps, and no one knew that it would play a crucial role in the future of online life. But it turned out that this business is too powerful. It is reported that the users of Google Maps have already broken through the 1 billion. It has become Google’s second largest asset after the search engine.

　　Google Maps has promoted the concept of "location" on the Internet from the very beginning. In fact, we are now one of the most commonly used in map applications about "location". The reason why modern maps have developed to this day may also be due to the appearance of Google Maps, of course, including the emergence of various LBS applications. Of course, Google is not the first to make maps. As early as 2003, Google had a product called "Search byLocation" (search by location). The service was launched in September 2003 as an experimental project in Google Labs, which was probably Google’s first map-related project.

　　In 2004, Google made three modest acquisitions of Keyhole, Where2 and Zipdash. Keyhole was the largest of the three deals, but the exact price has not been disclosed. At the time, the three-year-old company, which had 30 employees, was selling an enterprise-grade satellite mapping software for $69.95. The key technology was to stitch together satellite imagery into large maps of the world and then cut them into millions of pieces, allowing users to get a bird’s-eye view of the earth and then locate specific locations. In 2004, Zipdash, a start-up company with only three employees, was developing a mobile transportation app. Interestingly, because they were not registered, it was not even a "company". At the time, Zipdash only supported Nextel phones. Zipdash only sold for 2 million dollars. Google picked up a big bargain. Where2 developed a web version of Google Maps, Keyhole developed a desktop version of Google Earth, and the mobile version of Google Maps developed by the smallest Zipdash became the most important product.

　　It is reported that Google Maps’ traffic has been rising due to two things: Google Maps has added satellite data from Keyhole, allowing people to overlook their homes from the sky; Google has optimized the code to make Google Maps run faster. Since then, Google Maps’ growth has been uncontrollable. Selling the satellite imagery business now does not mean that Google does not make maps. On the contrary, it is one of the important pivots of Google. Especially in the era of mobile Internet, this business is indispensable.

　　Uber’s Small Ambitions

　　It is reported that Uber plans to invest $500 million to start drawing its own maps, and the plan also includes launching map viewing vehicles in the United States and Mexico to collect data and images. Uber’s ride-hailing service has always relied on Google Maps, and Google has no plans to enter the ride-hailing service field, so there is no conflict of interest between the two companies, and the two companies are also happy to cooperate on maps.

　　However, as both companies move towards autonomous driving that relies heavily on maps, the former partners have become competitors, and neither company expects further cooperation on maps. It makes sense for Uber to create its own maps to replace Google Maps.

　　Moreover, Uber’s mapping needs are focused on the accuracy of roads and locations, and Google Maps currently includes too much content, some of which is not relevant to Uber’s business. As Uber points out, "Google is great, but information like ocean terrain has nothing to do with Uber."

　　So Uber wanted to start from scratch and create its own maps. They hired Brian McClendon, the head of Google Maps, as a vice president and in charge of the map business. Then, a multi-year partnership agreement was reached with DigitalGlobe, a satellite imaging company, whose satellites would provide Uber with high-definition images.

　　Then, after Brian McClendon, Uber hired a second Google Maps executive, Manik Gupta, director of product management for Google Maps, who has been with Google Maps for seven years, to become director of mapping products.

　　Uber hopes to get rid of its dependence on Google Maps by strengthening its mapping business, so as to better control its own assets. In the future, more products or physically connected applications may come from third-party providers, so as to better participate in the competition. Of course, making maps is also a lot of pressure for Uber, and both technology and investment are key.

　　Google’s sale of its satellite imagery business is undoubtedly beneficial for divesting assets and reducing expenses. Coupled with the fact that its own product space will not be greatly affected, it may also be a better choice for Google Maps to divest its "hardware" business and focus on its own content. With the rapid development of the mobile Internet, mobile applications will become more diverse, and the demand for maps will also give rise to more development opportunities. This is not just a mobile application, including unmanned cars, unmanned aircraft, etc., will rely on the simultaneous follow-up of maps, and the extension of technology will also be more diversified. We also believe that more technologies and products will emerge, truly allowing users to have a better application experience.